Being your own boss, working from home, financial freedom, these all the things that motivate people to become entrepreneurs.
But the fact is, while a lot of people dream about having all of these things, most will never take even the first steps to become an entrepreneur, why not? For a lot of us, coming up with a “million dollar idea” is easy, implementing it is not.
Knowing how to get your business started is the hardest part. There are a lot of things to think about. Is my idea even good enough? How do I get financing? How am I going to market the business. Do I even have the time to start a business? And it seems like a million more questions come flooding through your mind.
Because all of these things are legitimate concerns and many don’t have a clear cut “right” answer, many people end up doing nothing.
Today, we are going to talk about the most common issues new entrepreneurs face and how to overcome them. Let’s take a look at the 23 tips for new entrepreneurs:
1. Evaluate Your Idea
In any list of tips for entrepreneurs, this should always rank as number one. Do you have a business idea that will work? Good business ideas will do at least one of the following.
A. Make a person’s life easier/better – The home computer has made communication much easier, especially over long distances.
B. Save people time or money – The advent of the washing machine saved countless hours of hand washing clothes item by item.
C. Adds value to an existing product – The value of home computers really increased with the development of software. Word processors, accounting and tax software, spreadsheets etc.
2. Evaluate Yourself
This can be difficult, especially because it requires you to be completely honest. The up side is that if you are honest it’s invaluable knowledge to have.
What type of a person are you? Are you a “big picture” person or a “detail orientated” person. Are you good with accounting and numbers or would you rather be out meeting customers and selling products?
Understanding your strengths and weaknesses will tell you how you need to allocate resources.
3. Do Market Research
You not only need to know your product or service inside and out, but you also need to know your customer inside and out.
Who are you marketing to? What is the benefit that you or your product is giving them? What is there biggest complaint about their current product or service? Does yours fix that problem? Just how big is the market for your product or service?
Through market research, you should be able to answer all of these questions.
4. Have a Business Plan
A lot of new entrepreneurs get stuck with this one because they don’t know how to do it. The important thing here is to not get to bogged down in the details.
When you are first starting out, your funding sources are probably going to be friends, family and maybe a bank that does SBA loans. They are not expecting anything to elaborate, but you must have a well thought-out business plan to show them. Here’s a great article on how to write a business plan.
5. Think About Branding
Don’t just think about branding as a logo or catch-phrase. Branding is the way you will differentiate yourself from your competition. Branding is what makes you or your product unique. Ultimately, branding is why customers will choose your products over the competition.
No matter how you decide to brand yourself, it’s going to take time and consistency, so get started right away!
6. Secure a Domain for Your Website
In today’s world, having a website is a must. It really doesn’t matter what type of business you have, you need a good website.
Securing your domain name, while it’s a simple process, it’s not uncommon to find that your first choices are taken.
For example, “Donny’s Lawn Service” is probably already taken. Don’t get discouraged, just get creative. You might try “Lawn Maintenance by Donny” or “Donny’s Executive Lawn Service”, “Landscaping by Donny”, “Donny’s California Lawn Service”.
Whatever you choose, think of your website as an extension of your branding efforts.
7. Get Your Social Media Set Up
Much like a website, having a social media presence is a must in today’s world. Facebook, Twitter, Instagram, Pinterest are all valuable places for you to market your business and engage with customers.
Securing your social media presence now to get a jump start on your launch.
8. Decide on a Legal Structure
Is your business a Sole Proprietorship, LLC, Partnership, Corporation? What’s the difference? All of these entities have their own strengths and weaknesses as well as tax consequences. This is where professional advice is a must.
Consult your lawyer and tax adviser as to the best option for your situation.
9. Register with the Government
Exactly what you need to do will depend on what type of business you have. If you have a retail store, you will normally need a business license and sales tax license. If you do personal services such as hair or nail salons, your will need to register with the local health department.
Depending on the business structure you have an EIN (Employer Identification Number) maybe required. You can find a complete list of federal and state licensing requirements on the SBA’s website.
10. Make Financial Projections
Remember that research we talked about earlier? Here’s where it comes in handy. You’ll want to have a good idea of exactly what your startup costs will be.
Things like inventory, marketing, rent, utilities should all be in there, but also make sure that you are accounting for things like a (modest) salary for yourself, you need to be able to live while you are getting started.
Insurance, legal and professional fees, questions and concerns that require expert advice are bound to come up in the first year of the business.
11. Develop a Marketing Plan
The days when “if you build a better mouse trap the world will beat a path to your door” are over. In today’s world, marketing is what determines the success of a business.
First you’ll need to define your market, are you selling something to a locally (Boutique, Hair / Nail Salon, Lawn Service) or are you going to be selling nationally or even internationally (Software, Electronics, Consulting Services)?
Your marketing strategy will depend on these and other factors.
12. Set up a Sales Plan
While a marketing plan is focused on how to get people interested in your product, the sales plan’s focus is about turning that interest into revenue.
The type of sales plan you develop should be directly related to what you are marketing. If it’s a brand new never seen before product, having a physical sales force that can go out and show the product demonstrating how it works might be useful.
On the other hand, if it’s software or a consulting service it’s probably much more efficient to build a website with a good sales funnel.
13. Start Securing Funding
Once you have the financial projections and you know how much you’ll need, you can start looking for funding.
So how much funding will you need? If your financial projections show that you will need $40,000 the first year, you should secure funding in the range of $50,000 – $55,000. And where should you get this funding, the very first place should be through your own resources.
Now, you don’t need to put every last penny you have into it, but going to others for funding without any “skin in the game” on your part will not inspire confidence.
Other funding sources can include, SBA loans through banks, successful business people looking to invest and even crowd funding. Oh and don’t forget friends and family!
14. Set up an Accounting System
You can either do this in house, or by hiring an outside firm. Keep in mind that your accounting will need to be kept up to date and it can be time consuming.
You maybe better off spending your time growing the business and letting an outside firm handle this aspect of the business.
15. Find a Good Insurance Broker
Getting the right insurance is a must. Without the right insurance, you are not only risking the business itself, but potentially all of your personal assets too.
Besides, your banks and investors wont even consider investing if you don’t have the proper insurance. Most businesses have a trade association, this is a great resource for your insurance needs.
16. Start Putting Together a Team
One of the most important tips for entrepreneurs is to assemble the right team. A lot of times founders will try to be a “Jack of all trades” and do everything. This is a mistake, a good rule of thumb is that entrepreneurs are ‘big picture” and employee are “specialists”.
17. Consider Compensation Packages for Key Employees
One thing that almost all start ups have in common is a lack of money. You want to attract the best employees but you are competing with more established companies that can often times pay more.
Consider some creative options when hiring key employees. For instance, you may not be able to offer a company car, but you may be able to pay for mileage. You may not be able to match a salary, but consider giving key employees a stake in the company. There are always creative ways around problems.
18. Setup a Work Space
It doesn’t matter if you are going to be working by yourself at home or if you’ll have several employees. You need a professional work space.
If that involves leasing office space, you’ll most likely need a security deposit, first months rent as well as deposits and fees for utilities.
If you are working out of your home, set aside a area that is dedicated for work. It should be a place that you can work uninterrupted and is quiet enough that you can make professional business calls without dogs barking and babies crying.
19. Start Getting the (Pre-Launch) Word Out
The launch of your start up should not come as a surprise. You need to be building your brand and creating a presence in the marketplace before you launch.
Start joining discussion boards devoted to your industry or profession. Offer tips and suggestions on your social media pages to get likes and followers. All of these things will create excitement and anticipation for your official launch.
20. Get Feedback
This can be included in your pre-launch activities. Offer a prototype, or give a description of the service and ask for feedback.
Don’t get upset or discouraged by negative comments. What you are looking for is a pattern. What aspects of your product or service get the most positive and negative reviews? Use this information to make adjustments to the product / service, or it just change the way you present (market) your product / service.
21. Do a “Soft Opening”
A soft opening is basically just a practice run for your grand opening.
The soft opening is where you will start getting your very first “word of mouth” advertising. It’s also where you will work out the kinks in the system that inevitably occur.
22. Launch Your Grand Opening
This is the day you’ve been waiting for, everything is set up, you’ve worked out any issues during the soft opening and now your ready to go.
The grand opening should be a big event with a lot of pre-planning and social media hype.
Notify trade associations, Facebook groups and discussion boards. Offer “door buster” deals to the first X number of people who sign up or purchase a product.
23. Constantly Evaluate and Adjust
Remember when we talked about doing all that planning? Well now you will need to evaluate those plans and make adjustments as needed.
There’s no such thing as a straight line to success in business, and even the best laid plans hit road bumps.
Your job as a manager is to recognize the bumps before they damage the car. Remember that it’s always better to catch problems too early than too late.
Evaluate, Adjust, Monitor, Repeat.
The Bottom Line
Starting a new business can be one of the scariest, stressful, agonizing things you can do in life. But it also can be one of the most rewarding and fulfilling things you’ll ever do.
I like to say that businesses are like marriages, bad ones are awful, but good ones are priceless. And just like a marriage, the more you work at it the better it gets.
So here’s to a solid foundation to both your relationships and business ventures!
